Tuesday, February 03, 2009

Jeff Berkowitz: Ninety-nine percent of the time free markets work? They’re faster and better than government?

5th CD Primary Candidate Charles Wheelan [D-Chicago]: Absolutely.************************************Jeff Berkowitz: …Some of the voters in the 5th Cong. Dist. have lost their job and they are looking for a new one… and they are hearing two strains of thought…So, which is it? As people watch this in February, were the bailouts a major way of addressing that public policy issue and a good thing, as Bush would say, or as his critics would say, he panicked and turned a slight recession into a major problem? Who’s right?

5th Cong. Dist. Primary Candidate Charles Wheelan [D-Chicago]: [Watch Wheelan show here]I think the bailouts were, by and large, the right approach, if not necessarily done correctly, in part because we were flying blind--this is Chapter 37 in a textbook that stopped at Chapter 36. And, we should, and do learn from the Great Depression, and so on. But the real danger here, then and now—and I support Barack’s fiscal stimulus [plan], as well, with all kinds of caveats that I hope we will come back to—is if we...******************This week's Chicago Metro suburban edition of "Public Affairs," features Charles Wheelan (D-Chicago), 5th Cong. Dist. Democratic Primary candidate, discussing and debating domestic policy, foreign policy and cultural issues. See, below, for more about the show's topics, a partial transcript of the show and the Chicago Metro suburban airing schedule. **************************You can also watch this show on your computer. This show was taped on January 18, 2009.**********************The 5th CD special primary election is on March 3, 2009. The former occupant of the Illinois 5th CD seat was Rahm Emanuel, who resigned in January to become White House Chief of Staff. Rahm Emanuel appeared on Public Affairs during the March, 2002 primary, as well as after that as a Congressman.******************State Rep. John Fritchey (D-Chicago), who is also a 5th CD Dem. Primary Candidate, will be featured on the Suburban edition of Public Affairs during the week of Feb. 9, 2009.***************************************************** Cook County Commissioner Mike Quigley (D-Chicago), who is also a 5th CD Dem. Primary Candidate, will be featured on the Suburban edition of Public Affairs during the week of Feb. 16, 2009.***************************************** WAS THE 700 BILLION DOLLAR BAILOUT NECESSARY?

Jeff Berkowitz: …Some of the voters in the 5th Cong. Dist. have lost their job and they are looking for a new one… and they are hearing two strains of thought…about when this thing came up in the fall of 2008… maybe earlier. Some would say it would have been a slight recession, but Bush panicked, listened to Treasury Secretary Henry Paulson and he went into these major league bailouts, seven hundred billion dollars, which we’re still hearing about. That’s one point of view—he panicked and turned a slight recession into…a major recession. Some would say [it is even] worse than that. Others would say, no, this is a major problem, Bush had to do something, and they would say we are facing and we were facing something similar to the Great Depression in the 30s, which in the University of Chicago economics department we called the “great contraction.” … So, which is it? As people watch this in February, were the bailouts a major way of addressing that public policy issue and a good thing, as Bush would say, or as his critics would say, he panicked and turned a slight recession into a major problem? Who’s right?

5th Cong. Dist. Primary Candidate Charles Wheelan [D-Chicago]: I think the bailouts were, by and large, the right approach, if not necessarily done correctly, in part because we were flying blind--this is Chapter 37 in a textbook that stopped at Chapter 36. And, we should, and do learn from the Great Depression, and so on. But the real danger here, then and now—and I support Barack’s fiscal stimulus [plan], as well, with all kinds of caveats that I hope we will come back to—is if we get caught in negative feedback loops, it’s that one rare occasion when markets don’t self-correct. The beauty of markets is that by and large, 99.9 percent of the time, if something happens, it sets in motion its own correction. The price of gas goes up, everybody clamors and says the government ought to do something about it. My answer is no, just stand still, and then when the price of gas goes up, you’ll use less of it, I’ll use less of it, people will produce more of it, the folks in the venture capital community are going to come up with alternatives. That’s all good.

DO FREE MARKETS WORK?

Jeff Berkowitz: So you believe in free markets.

Charles Wheelan: Of course.

Jeff Berkowitz: Ninety-nine percent of the time free markets work? They’re faster and better than government?

Charles Wheelan: Absolutely.

Jeff Berkowitz: Am I getting that right?

Charles Wheelan: You’re getting that right. And, it sends all the right signals—

WAS FALL, 2008 THE EXCEPTION TO MARKETS WORKING?

Jeff Berkowitz: But this time you think there was something that could have been different. If you were there, in Congress, in 2008, and you were representing the 5th congressional district and the President came to you, and said he’s got this seven hundred billion dollar bailout program, which sounded as if it were going to be for the financial sector—you Charlie Wheelan would have voted yea?

Charles Wheelan: The first thing I would have said is, don’t call it a bailout. That was never a term that was used and it’s a terrible term. I would have called it stabilization; I would have called it something else, because the government is taking positions, preferred stock options-

WOULD WHEELAN HAVE BEEN PROUD IN JANUARY 2009 OF HIS FALL, 2008, “STABILIZATION,” VOTE?

Jeff Berkowitz: But how would you have voted?

Charles Wheelan: I would have voted in favor of it.

Jeff Berkowitz: You would have voted in favor. Looking back, would you have been proud of that vote, as we speak here on January 18th? Do you think it turned out that it was a good vote?

5th Cong. Dist. candidate Charles Wheelan [D-Chicago]: Proud is probably not the right word. I would think it would still be defensible. And the reason is, I think when you are facing those negative feedback loops, the danger is, your house gets under water, you can’t afford the loan anymore, the bank goes into foreclosure, now it gets dumped on the market, it drives the price of my house down. Meanwhile, the bank’s capital is contracting, they can make fewer loans, and all of this starts feeding in a negative direction, so that I’m sitting over on the other part of town, in a house that used to be worth a lot more, but now since the bank isn’t lending, and your house and others have gone into foreclosure, my house is worth less, maybe that falls under water. I start to panic, I stop going out to dinner-- to all the local restaurants, and they lay people off. So, my fear is that those negative feedback loops are more potentially dangerous than a bailout package that is imperfect. I’m going to err on the side of action.

SHOULD THE GOVERNMENT HAVE MOVED MORE GRADUALLY IN THE FALL, 2008?

Jeff Berkowitz: But you know, when we look back at least on the third quarter, through the end of September, people were saying credit was already freezing up, but in the third quarter, lending of banks across the country increased, by one per cent or two. So it hadn’t frozen up yet. And… what we see now is banks have more reserves but they’re not lending, they’re calling [their borrowers] up [and] they’re cutting their credit. It seems like financial institutions are scared, they’re looking over their shoulder. There’s this mark-to-market rule that came into effect [a year or two ago] that wasn’t changed. So, would it have been better to say, change the mark-to-market rule and don’t mark down the value of assets [to their estimated current market value], don’t do this major bailout, don’t scare these institutions—[which would produce] a more gradual correction of an economy that had gone too much into credit.

BAIL-OUT CHOICE ANALOGOUS TO CHOICE OF THERAPEUTIC DRUGS?

5th Cong. Dist. candidate Charles Wheelan [D-Chicago]: My sense is not gradual. That this is-- the physician is standing over the patient, and I will fully admit that I’ve got six drugs in front of me and I don’t know exactly which ones are going to work, but I have a pretty good idea, or I fear that if we don’t try something, it could get very bad.

Jeff Berkowitz: So you’re the physician and you chose one of those drugs, that was-

Charles Wheelan: Or some combination.

Jeff Berkowitz: And that was the so-called [700 billion dollar] bailout, which you would call stabilization.

Charles Wheelan: Exactly. **************************************************Public Affairs thanks Amy Allen, a Public Affairs intern, for preparing a draft of the above partial transcript of our show with Charles Wheelan, 5th CD Democratic Primary candidate. ******************************************** Charlie Wheelan, a 5th Cong Dist.. Dem. Primary candidate running in the March 3, 2009 special election to replace Cong.Rahm Emanuel, debates and discusses [watch Wheelan show here] the issues with show host and executive legal recruiter Jeff Berkowitz. Wheelan is a Senior Lecturer at the Harris School of Public Policy studies, has authored a book titled, "Naked Economics," and thinks he will be known in the 5th CD race as "the economics guy."

Perhaps significantly, Charlie Wheelan has the same title, Senior Lecturer at the University of Chicago, as President Obama used to have when he taught for many years at the University of Chicago Law School [Watch five minute video of Berkowitz-Obama interviewsreferencing Obama's U of Chicago law school teaching days.]

Wheelan, who had raised more than 100K for the race by the day of the taping, January 18, 2009, hopes to raise a total of 500 K by the day of the Primary. He also has an army of one hundred fifty, or so, former grad students who took his class, and who, among others, are supporting Wheelan's campaign.

Topics discussed include the bailouts of the financial sector;Israel and Iraq; skillls, minimum wage and employment; status of the economy and efforts to repair the economy; education, reform and school choice; Healthcare reform; Gays, guns, God and abortion-- and much, much more. ********************************* Public Affairs Chicago Metro suburban airing schedule.

The show featuring 5th CD Dem. Primary candidate Charles Wheelan is airing this week in the North and Northwest Chicago Metro suburbs in its regular slot:

and on Monday, Wednesday and Friday at 8:30 pm on Comcast Cable Channel 19 in Bannockburn, Deerfield, Ft. Sheridan, Glencoe, Highland Park, Highwood, Kenilworth, Lincolnshire, Riverwoods and Winnetka. *****************************************************************The "Public Affairs," show featuring 5th CD Dem. Primary candidate Charles Wheelan will also air throughout the City of Chicago this coming Monday night, February 9, 2008, at 8:30 pm on Cable Ch. 21 (CANTV) and that same night on cable in Aurora and surrounding areas at 7:30 pm on ACTV-10. The Aurora station, Aurora Community Television, Comcast Cable Ch. 10, reaches all of Aurora, Bristol, Big Rock and parts of Oswego, Sandwich, Sugar Grove and Montgomery.*************************************************The "Public Affairs," show featuring 5th CD Dem. Primary candidate Charles Wheelan will also air throughout the City of Rockford (and in surrounding areas) next Thursday night, February 12 at 8:00 pm on Cable Ch. 17. The surrounding areas reached by Ch. 17 include Byron, Cedarville, Cherry Valley, Loves Park, Machesney Park, Mount Morris, New Milford, Portions of Ogle County, Oregon, Polo, Stillman Valley, Winnebago, Portions of Boone County and Poplar Grove. *********************************************************The "Public Affairs," show featuring 5th CD Dem. Primary candidate Charles Wheelan may also air throughout the State of Illinois on the Illinois Channel.**************************************************** Jeff Berkowitz, Show Host/Producer of "Public Affairs," and Executive Legal Recruiter doing legal search can be reached at JBCG@aol.com. *************************************************************"Public Affairs," is a weekly political interview show airing in Chicago on CANTV, in the Chicago metro area, Aurora and Rockford on Comcast and also often on the Illinois Channel. You can watch the shows, including archived shows going back to 2005, here. **************************************************Recently posted shows on the Public Affairs YouTube page include shows with 5th Cong. Dist. Democratic Primary Candidate Charles Wheelan, State Senator Kwame Raoul on impeachment(D-Chicago), Democratic political campaign consultant Pete Giangreco on Blago's impeachment and the way in which the Obama Administration will operate, a recent Bill O'Reilly segment w/Berkowitz on Obama, shows with State Rep. Julie Hamos,(D-Evanston) newly minted State Rep. Mark Walker (D-Arlington Heights), essentially the first Dem to represent his district since the Civil War, on the connection between the mess in Springfield and in Cook County government, Chicago Alderman Manuel (Manny) Flores (D-1st Ward, Wicker Park) on impeachment of Rod, Chicago issues and a possible run to replace 5th CD Cong. Emanuel and much more.**********************************************************************